EIB Papers Volume 13. n°1/2008 - European Investment Bank

In some new member
states there is a serious
lack of administrative
absorption capacity,
which could jeopardize
planned increases
in infrastructure
investment.
136 Volume13 N°1 2008 EIB PAPERS
programmes for the production environment. 11 For 2007-13, however, there has been a reorientation
of expenditure, particularly in favour of policies aimed at growth and employment, with resources
for transport and energy increasing by nearly 139 percent (Box 2). These changes would be consistent
with previously identified investment needs. 12
The impact, however, will not be very evident until the NMS step up absorption of EU funds. As
noted by Rosenberg and Sierhej (2007), absorption of Structural and Cohesion Funds has picked
up only slowly in some countries. Demand is high and the contracting of funds already committed
under the 2004-2006 financial perspective is proceeding swiftly. Key bottlenecks come from limited
administrative capacities for handling (i) project supervision, (ii) efficient implementation, and (iii)
co-financing requirements after the submission of proper documentation. Increased allocations
under the new financial perspective for 2007-13 are likely to pose additional challenges. In particular,
they require an acceleration of past absorption rates if funds are not to be de-committed under the
n+ rules, which stipulate that if a country fails to use the allocated EU fund within a certain period
after the year in which it was committed, it will lose such unused allocation.
Box 2. Changes in expenditure orientation in the new EU financial perspective
Under the new EU financial perspective for 2007-2013, there is a reorientation of expenditure in
favour, in particular, of policies aimed at growth and employment. Main changes for 2007-2013
compared to 2000-2006 are as follows:
• 69 percent increase for Competitiveness for growth and employment (sub-heading 1a),
including:
• 139 percent increase for transport and energy
• 81 percent increase for environment-friendly transport (Marco Polo II)
• 75 percent increase for research (7th Research Framework Programme)
• 60 percent increase for the Competitiveness and Innovation Programme (CIP)
• 52 percent increase for knowledge/training (Life Long Learning and Erasmus Mundus
programmes)
• 21 percent increase for Cohesion for growth and employment (sub-heading 1b), including:
• 11 percent increase for structural funds
• 74 percent increase for the Cohesion Fund
• 8 percent decrease for the Preservation & management of natural resources (heading 2)
• 78 percent increase for Citizenship, freedom, security and justice (heading 3)
• 8 percent increase for the EU as a global player (heading 4)
Source: European Commission (2005b)
11 Basic infrastructure includes sectors such as transport, telecommunication, energy, etc.; human resources includes sectors
such as education, training, and research and development; and production environment includes sectors such as
agriculture, industry and services, and tourism.
12 Discussions with the European Commission on the specific country priorities regarding the use of these funds are based
on the National Strategic Reference Frameworks prepared by countries and sent to the European Commission.